Soybean oil is the natural oil extracted from whole soybeans. Typically, about 19% of a soybean’s weight can be extracted as crude soybean oil. The oil content of U.S. soybeans correlates directly with the temperatures and amount of sunshine during the soybean pod-filling stages. Edible products produced with soybean oil include cooking and salad oils, shortening, and margarine.

Soybean oil is the most widely used cooking oil in the US. It accounts for 80% of margarine production and for more than 75% of total US consumer vegetable fat and oil consumption. Soy oil is cholesterol-free and high in polyunsaturated fat. Soy oil is also used to produce inedible products such as paints, varnish, resins, and plastics. Of the edible vegetable oils, soy oil is the world's largest at about 32%, followed by palm oil and rapeseed oil. Soybean oil futures and options are traded on the Chicago Board of Trade (CBOT).

Soybean has attained a vital status in agriculture and oil economy of India. The country presently produces bout 6 million tonnes of soybean per annum. Out of this, 5% is used for food and feed, 10% for seed and 5% for oil extraction.

India is the fifth largest producer of soybeans in the world, with average production of 4,809 TMT (Thousand Metric Tonnes) of soybeans. Average consumption in India is 4,812 TMT of soybeans, giving them the rank of sixth largest consumer of beans in the world. India is primarily a closed economy in the soybean arena. India's imports average a mere 8 TMT, while exports average 0 TMT. India every year exports around 2-3 Million Metric Tonnes de-oiled cake (DOC) and earns valuable foreign exchange.

Despite being an exotic crop in India, its successful cultivation during the last two decades has helped in bridging the gap between availability and national demand of edible oil. After harvesting, soybean oil is extracted from the cooked, flaked beans using the commercial solvent hexane. Next, the resulting crude soybean oil undergoes further refinement - degumming, refining, bleaching, and deodorizing - to remove substances that affect the color, flavor, and stability of the oil. The substances removed during processing include free fatty acids, phosphatides, color bodies, sterols, ketones, and peroxides.

World production of soybeans in 2002/03 was a record-high 30.07 million metric tons, up 4.3% from the previous year's 28.82 million. The world’s largest producers are the US with 8.521 million tons of production (28%), Brazil with 5.062 million tons (17%), and the European Union with 3.190 million tons (11%). US production of soybean oil in 2003/04 was forecast by the USDA at 16.660 billion pounds, down from 18.438 billion in 2002/3 and the record high of 18.898 billion in 2001/02.

Global soybean oil exports in 2002/03 hit a record 10.160 million tons, up 11% from the previous year’s 9.180 million tons. Argentina is the largest exporter with 4 million tons in 2002/03. Asia is the world’s largest importer followed by the Middle East.